[Satnews] COM DEV International Ltd. (TSX:CDV), a manufacturer of space hardware subsystems, announces that it has entered into a definitive arrangement agreement with a subsidiary of Honeywell International Inc. (NYSE:HON) pursuant to which (i) Honeywell will acquire the equipment business of COM DEV by way of an acquisition of all of the outstanding common shares of COM DEV for cash consideration of up to $5.25 per common share, representing an enterprise value of approximately $455 million, and (ii) the exactEarth Ltd. data services business will be spun out as a publicly traded company with COM DEV's shareholders receiving their pro rata interest in COM DEV's 73 percent ownership in exactEarth Ltd. (collectively, the "Transaction"). (All figures in this news release are stated in Canadian dollars.)

COM DEV shareholders will receive an initial cash payment of $5.125 per COM DEV common share and 0.1977 of an exactEarth common share. Each shareholder will be eligible to receive a second payment approximately two weeks following the closing date of up to $0.125 per COM DEV common share, as described below. Assuming that exactEarth is valued at an enterprise value of $125 million (see the exactEarth Spinout information below), the exactEarth consideration would be valued at approximately $1.29 per COM DEV common share. Based on this assumption, the total Transaction consideration has a value of up to $6.54 per COM DEV common share and represents a 46 percent premium over COM DEV's closing share price of $4.49 on October 6, 2015, the day prior to confirmation by the Company that it was engaged in discussions regarding a potential change of control transaction involving the Company. The total consideration represents a 61 percent premium over the 20-day volume weighted average price of COM DEV shares on March 9, 2015, the date on which COM DEV provided a strategic update with respect to exactEarth and a refresh of its strategic plan.

Terry Reidel, Chair of COM DEV's Board of Directors, stated: "Following an extensive review of strategic options for COM DEV, the Board of Directors unanimously agrees that this transaction represents the alternative that maximizes current and future value for our shareholders. We are pleased to give our shareholders an opportunity to realize immediate benefits from the strategic growth plan our team has developed. This transaction enables shareholders to receive a premium for their shares while maintaining an ownership stake in our rapidly growing data services business, exactEarth."

COM DEV's Board of Directors, after consultation with its financial and legal advisors, has unanimously determined that the proposed transaction is in the best interests of COM DEV, is fair to COM DEV's shareholders and recommends that they vote in favour of the Transaction. The Board accepted the recommendations of the Special Committee of the Board that had been formed earlier in the year to conduct a detailed review of strategic options available to the Company. Canaccord Genuity Corp., acting as financial advisor to the Special Committee, has provided an opinion that the consideration to be received by shareholders under the transaction is fair, from a financial point of view, to COM DEV's shareholders.

Tim Mahoney, President and CEO of Honeywell Aerospace, stated, "COM DEV is a terrific fit for Honeywell, growing our existing space and connectivity businesses and expanding our global reach to new international customers. COM DEV's differentiated technologies and strong position in the growing connectivity industry make the company an attractive addition to our business. We are equally excited about what we can bring to COM DEV, specifically our broad product portfolio, deep industry expertise and relationships, global sales force and brand, and our proven Honeywell Operating System. We are confident that all of our key processes and initiatives will be immediate differentiators for COM DEV."

Michael Pley, CEO of COM DEV, stated, "We are pleased to join the Honeywell team. I believe that as a global corporation with extensive market reach and a proven ability to integrate acquisitions, Honeywell will help us realize our ambitious growth plans. I am confident that COM DEV's customers will benefit from us joining a larger organization that shares our commitment to quality."

Transaction Details

The Transaction will be carried out by way of a plan of arrangement under the Canada Business Corporations Act. Under the plan of arrangement, holders of COM DEV common shares will receive up to $5.25 in cash and 0.1977 of an exactEarth common share, for each COM DEV common share held. COM DEV shareholders will receive, on the closing date, a cash payment of $5.125 per COM DEV common share. On the closing date, Honeywell will pay $10,000,000 in escrow for distribution to COM DEV shareholders following closing. Each COM DEV shareholder will receive a payment shortly following the closing date of up to $0.125 per COM DEV common share, with the amount of any such payment being determined based on the trading values of the exactEarth common shares following closing. Details of the escrow and contingent payment will be set out in the COM DEV management information circular to be sent to shareholders in connection with the Transaction.

A capital reorganization of exactEarth will be completed prior to the closing of the arrangement transaction, as more particularly described under "exactEarth Spinout Transaction." On completion of the arrangement, the former shareholders of COM DEV will hold approximately 73 percent of exactEarth, and Hisdesat Servicios Estrategicos S.A. will hold 27 percent of the basic issued and outstanding common shares of exactEarth (or approximately 70.9 percent and 26.2 percent, respectively, on a fully-diluted basis).

The completion of the Transaction is subject to approval by not less than two-thirds of the votes cast at a special meeting of COM DEV shareholders which is expected to take place in January 2016. The Transaction is also subject to applicable regulatory approvals and the satisfaction of certain closing conditions customary in transactions of this nature, including the approval of the Ontario Superior Court of Justice. The Transaction is not subject to any financing condition.

The directors and certain shareholders of COM DEV, collectively holding approximately 11 percent of the Company's outstanding common shares, have entered into support agreements with Honeywell pursuant to which they have agreed to support and vote in favour of the Transaction. The arrangement agreement also provides for customary board support and non-solicitation covenants, reflecting the Board's fiduciary obligation.

Further details of the transaction will be included in a management information circular to be mailed to COM DEV shareholders in accordance with applicable securities laws. Copies of the arrangement agreement and the information circular will be filed with Canadian securities regulators and will be accessible on SEDAR at www.sedar.com. Shareholders are urged to carefully read the management information circular.

The Transaction is targeted to close by the end of the first quarter of calendar 2016, subject to the satisfaction or waiver of all conditions in the arrangement agreement, including the receipt of all necessary approvals.

exactEarth Spinout Transaction

Immediately prior to the completion of the exactEarth Spinout Transaction and completion of the Transaction, the following transactions will be completed:

i) COM DEV will make payments to its partner in exactEarth, Hisdesat, in the aggregate amount of approximately $9.7 million for partial consideration of the termination of the existing shareholders agreement with Hisdesat.

ii) Hisdesat will purchase approximately $1.9 million of debt owed by exactEarth to COM DEV.

iii) COM DEV and Hisdesat will convert the entire remaining shareholder debt they are owed by exactEarth, totaling $47 million, into equity at an implied enterprise value of $125 million.

iv) COM DEV and Hisdesat will subscribe for additional equity for aggregate proceeds to exactEarth of $20 million, with COM DEV's portion of such equity subscription being $14.6 million, such that COM DEV's equity interest remains 73 percent.

v) The debt conversion and capital injection are intended to strengthen exactEarth's balance sheet and provide it with liquidity and resources to seek public listing for its common shares and to continue to fund its growth strategy as a standalone company.

vi) Certain members of exactEarth management will subscribe for up to 100,000 shares of exactEarth at a price of $6.50 per share.

vii) The management incentive plans as will be more fully described in the COM DEV circular (with such plans expected to be substantially as documented in conjunction with exactEarth's proposed July 2015 initial public offering).

viii) Prior to the distribution of exactEarth shares by COM DEV, exactEarth will amend its articles such that there will be a single class of common shares outstanding.

Following the above series of pre-closing steps, exactEarth is expected to have 21,538,109 basic shares outstanding. COM DEV shareholders will own 15,722,819 or approximately 73 percent, while Hisdesat will own 5,815,289 or approximately 27 percent, consistent with the current ownership split of the two existing shareholders.

Subject to regulatory approval, the initial Board of Directors of exactEarth is expected to consist of Miguel Angel Panduro Panadero, Miguel Angel Garcia Primo, Peter Mabson, Maria Izurieta and three other individuals to be named shortly who will be independent of exactEarth, including one who is expected to act as chair of the board.

The following information is provided to update and supplement some of the existing disclosure relating to exactEarth, for the convenience of investors.

Total invested capital of $103 million.

Revenue of $23.6 million, EBITDA of $4.1 million and adjusted EBITDA of $6.4 million for the twelve months ended July 31, 2015.

Revenue of $19.1 million in the nine months ended July 31, 2015, representing growth of 68 percent over the nine months ended August 1, 2014.

EBITDA of $3.6 million in the nine months ended July 31, 2015, compared to EBITDA of $1.2 million in the nine months ended August 1, 2014.

Adjusted EBITDA of $5.7 million in the nine months ended July 31, 2015, compared to Adjusted EBITDA of $1.1 million in the nine months ended August 1, 2014.

Unrealized subscription revenue of $18.5 million as at July 31, 2015.

Management of exactEarth has reaffirmed its target annual operating model for the long term which sets out: overall revenue growth of 30 percent; Adjusted EBITDA of 35 percent; gross profit of 60 percent; product development expense of 7.5 percent; selling, marketing and general and administrative expenses consisting of 17.5 percent of overall revenue.

Additional detailed information on exactEarth is available in exactEarth's Fiscal 2015 Third Quarter Financial Statements (Unaudited) and Management's Discussion and Analysis to be made available today on COM DEV's company profile at www.sedar.com. Full details regarding exactEarth's business will be contained within the COM DEV management information circular.

COM DEV Quarterly Dividend

In connection with the Transaction, the Board has determined to amend its dividend policy effective immediately and to suspend its quarterly dividend until completion of the Transaction.

Advisors

COM DEV is being advised on the Transaction by Canaccord Genuity as its financial advisors, and Gardiner Roberts LLP as its legal counsel. Osler, Hoskin & Harcourt LLP acted as legal counsel to the Special Committee of COM DEV's Board of Directors. The Black Box Institute provided strategic advice to management of COM DEV. exactEarth obtained legal advice from Stikeman Elliott LLP.